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Medicare can no longer automatically deny coverage requests for sex reassignment surgeries, a federal board ruled Friday in a groundbreaking decision that recognizes the procedures are medically necessary for people who don't identify with their biological sex.

Ruling in favor of a 74-year-old transgender Army veteran whose request to have Medicare pay for her genital reconstruction was denied two years ago, the agency's Departmental Appeals Board said there was no justification for a three-decade-old HHS rule excluding such surgeries from procedures covered by the national health program for the elderly and disabled.

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``Sometimes I am asked aren't I too old to have surgery. My answer is how old is too old?'' the veteran, Denee Mallon, of Albuquerque, New Mexico, said in an email interview before the board issued its decision. ``When people ask if I am too old, it feels like they are implying that it's a `waste of money' to operate at my age. But I could have an active life ahead of me for another 20 years. And I want to spend those years in congruence and not distress.''

Jennifer Levi, a lawyer who directs the Transgender Rights Project of Gay & Lesbian Advocates and Defenders in Boston, said the ruling does not mean Medicare recipients are necessarily entitled to have sex reassignment surgery paid for by the government.

Instead, the lifting of the coverage ban means they now will be able to seek authorization by submitting documentation from a doctor and mental health professionals stating that surgery is recommended in their individual case, Levi said.

No statistics exist on how many people might be affected by the decision. Gary Gates, a demographer with The Williams Institute, a think tank on LGBT issues based at the University of California, Los Angeles, has estimated that people who self-identify as transgender make up 0.3 percent of the U.S. adult population. Over 49 million Americans are enrolled in Medicare.

The cost of gender reassignment surgery varies, but typically ranges from $7,000 to $50,000, according to the Transgender Law Center in Oakland, California.

In Friday's ruling, the appeals board said that HHS lacked sufficient evidence in 1981 when it made a ``national coverage determination'' holding that Medicare recipients were ineligible for what it then called ``transsexual surgery'' because the procedure was too controversial, experimental, and medically risky.

The panel went on to say that regardless of what the record showed then, studies and experts have since shown the efficacy of surgical interventions as a treatment for gender dysphoria, the diagnosis given to people who experience extreme distress due to the disconnect between their birth sex and their gender identity.

``We have no difficulty concluding that the new evidence, which includes medical studies published in the more than 32 years since issuance of the 1981 report underlying the NCD, outweighs the NCD record and demonstrates that transsexual surgery is safe and effective and not experimental. Thus, as we discuss below, the grounds for the ...exclusion of coverage are not reasonable," the civilian panel said.

The appeals board's decisions are binding on HHS unless they are appealed in federal court. The Centers for Medicare and Medicaid Services, the agency within HHS that manages Medicare, opted not to defend the transgender surgery exclusion before the five-member board and had initiated the process for lifting it on its own before Mallon filed her complaint.

The ruling does not apply to Medicaid, which provides health coverage for individuals and families with low-incomes and is regulated by the states. Some states have exclusions on sex reassignment surgeries and the sex hormones transgender people often take during their transitions, while others evaluate claims on a case-by-case basis.

Transgender health advocates said that because private insurance companies and Medicaid programs often take their cues from the federal government on what is considered medically necessary, elective or experimental, the decision could pave the way for sex-reassignment surgeries to be a routinely covered benefit.

Mallon was born a man and identifies as a woman.

``When I learned that Medicare denies the essential care I need, I remember saying `This is not right. They're relying on these archaic reasons to deny me the care my doctor agrees I need? I knew I had to do something to challenge that,'' Mallon said.